806 KAR 9:210. Financial responsibility forms; time limit for replacement of evidence of licensee financial responsibility.

806 KAR 9:210. Financial responsibility forms; time limit for replacement of evidence of licensee financial responsibility.

RELATES TO: KRS 304.9-105, 304.9-260, 304.9-270, 304.9-330, 304.9-430, 304.10-140, 304.15-700

STATUTORY AUTHORITY: KRS 304.2-110(1), 304.9-080(7), 304.9-105(6)(b)

NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.2-110(1) authorizes the Executive Director of the Office of Insurance to promulgate administrative regulations necessary for or as an aid to the effectuation of any provision of the Kentucky Insurance Code as defined in KRS 304.1-010. KRS 304.9-080(7) requires the Executive Director of the Office of Insurance to prescribe all forms required under KRS Chapter 304 Subtitle 9 as to licenses. KRS 304.9-105(6)(b) requires the Executive Director of the Office of Insurance to establish a time limit for licensees to replace evidence of financial responsibility which has been terminated. This administrative regulation specifies the forms insurers and financial institutions shall use for applicants and licensees required to file proof of financial responsibility and establishes a time limit for licensees to replace evidence of financial responsibility which is being terminated.

Section 1. Definitions. (1) "Evidence of financial responsibility" means the documents described in KRS 304.9-105(6), 304.9-260(5), 304.9-270(3)(a), 304.9-330, 304.10-140, 304.15-700(4), and 806 KAR 9:030, Section 1.

(2) "Licensee" means an agent, a consultant, a surplus lines broker, a viatical settlement broker, a viatical settlement provider, an apprentice adjuster, and an adjuster required by the Kentucky Insurance Code or administrative regulations of the executive director to maintain evidence of financial responsibility on file with the Office of Insurance.

Section 2. Forms for Proof of Financial Responsibility. The insurer or financial institution providing financial responsibility for a licensee shall file one (1) or more of the following completed forms with the Department of Insurance:

(1) Form 99-1, "Evidence of Legal Liability Insurance Form";

(2) Form 99-2, "Irrevocable Letter of Credit Form";

(3) Form 99-3, "Financial Responsibility Surety Bond Form";

(4) Form 99-4, "Assumption of All Appointed Agents’ Legal Liability Form"; and

(5) Form 99-6, "Assumption of Named Agents’ Legal Liability Form".

Section 3. Time Limit for Replacement of Evidence of Licensee Financial Responsibility. A licensee shall replace evidence of financial responsibility on or before thirty (30) days from the date notice is mailed by the executive director to the licensee's address of record filed with the executive director.

Section 4. Responsibility of Insurers and Financial Institutions Providing Financial Responsibility to Licensees. (1) The thirty (30) days prior written notice of cancellation of financial responsibility required by KRS 304.9-105(6)(a), 304.9-270(3)(a), 304.9-330, 304.10-140(1), and 304.15-700(4) shall be measured from the date the office receives the written notice.

(2) The insurer or financial institution shall give written notice to the executive director on Form 99-5 electronically or by mail.

(3) The insurer or financial institution shall give at least thirty (30) days prior written notice of cancellation on the same date to the executive director and to the licensee.

(a) The executive director shall be notified by the insurer or financial institution by filing the completed Form 99-5 with the office.

(b) The licensee shall be notified by the insurer or financial institution by mailing a copy of the completed Form 99-5 to the licensee’s last known address. For legal liability policies, this notice shall be in addition to any notice required by KRS 304.20-320.

Section 5. Incorporation by Reference. (1) The following material is incorporated by reference:

(a) Form 99-1, "Evidence of Legal Liability Insurance Form (12/2002 edition)";

(b) Form 99-2, "Irrevocable Letter of Credit Form (7/2002 edition)";

(d) Form 99-4, "Assumption of All Appointed Agents’ Legal Liability Form (7/2002 edition)";

(e) Form 99-5, "Financial Responsibility Cancellation Form (7/2002 edition)"; and

(f) Form 99-6, "Assumption of Named Agents’ Legal Liability Form (7/2002 edition)".

(2) This material may be inspected, copied or obtained, subject to applicable copyright law, at the Kentucky Office of Insurance at 215 West Main Street, Frankfort, Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m. (13 Ky.R. 2173; Am. 14 Ky.R. 213; eff. 8-5-87; 27 Ky.R. 1338; 1805; eff. 1-15-2001; 29 Ky.R. 1363; 1843; 2098; eff. 2-16-03; TAm eff. 8-9-2007.)